PENALTY FOR NON-COMPLIANCE IN FILLING QUARTERLY PROGRESS REPORT AND ANNUAL AUDIT CERTIFICATE. DETAILED ANALYSIS OF THE ORDER PASSED BY ORERA

INTRODUCTION

?Quarterly progress reports serve as a vital mechanism for maintaining transparency and accountability in the real estate sector. By mandating property developers to provide regular updates on their projects, regulatory authorities ensure that stakeholders, including potential buyers, investors, and regulatory bodies, are kept informed about the project's status.

These reports contain comprehensive details about various aspects of the project, including the number and types of apartments or plots booked, providing insight into the project's demand and market acceptance. Additionally, information on the number of garages booked offers valuable data on the utilization of ancillary facilities within the development.

Furthermore, the status of approvals obtained and those pending post-commencement certificate issuance offers transparency regarding regulatory compliance and potential challenges faced by the developer. It allows stakeholders to assess the project's progress and any potential risks associated with delays in obtaining necessary approvals.

Moreover, the requirement to update the project's status quarterly ensures that stakeholders have access to timely and accurate information, enabling them to make informed decisions regarding their involvement in the project. It also fosters trust between developers and stakeholders by demonstrating a commitment to transparency and accountability.

Overall, quarterly progress reports play a crucial role in enhancing confidence in the real estate market, promoting investor trust, and ensuring project efficient and transparent development. They serve as a cornerstone of regulatory oversight, empowering stakeholders with the information needed to navigate the real estate landscape effectively.

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The provision for quarterly progress reports has been provided u/s.11 of the Real Estate (regulation and development) Act, 2016[1]

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11. Functions and duties of promoter.—

(1) The promoter shall, upon receiving his Login Id and password under clause (a) of sub-section (1) or under sub-section (2) of section 5, as the case may be, create his web page on the website of the Authority and enter all details of the proposed project as provided under sub-section (2) of section 4, in all the fields as provided, for public viewing, including—

?(a) details of the registration granted by the Authority;

(b) quarterly up-to-date the list of number and types of apartments or plots, as the case may be, booked;

(c) a quarterly up-to-date list of the number of garages booked;

(d) quarterly up-to-date the list of approvals taken and the approvals that are pending subsequent to commencement certificate;

(e) quarterly up-to-date status of the project; and

(f) such other information and documents as may be specified by the regulations made by the Authority.

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In the event of a contravention related to the quarterly progress report requirement stipulated under this Act, the promoter shall be subject to penalties as outlined herein. If a promoter fails to adhere to the provisions concerning the submission of quarterly progress reports, as mandated by the regulatory authority, they shall be deemed in contravention of the Act. In such instances, the promoter shall be liable to a penalty, the magnitude of which may extend up to five percent of the estimated cost of the real estate project, as determined by the regulatory authority.

The said provision has been provided U/S. 61 of the Real Estate (regulation and development) Act, 2016[2]

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61. Penalty for contravention of other provisions of this Act. —

If any promoter contravenes any other provisions of this Act, other than that provided under section 3 or section 4, or the rules or regulations made thereunder, he shall be liable to a penalty which may extend up to five percent. of the estimated cost of the real estate project as determined by the Authority.

DEVELOPMENT

Recently, The Odisha Real Estate Regulatory Authority, under order no. 6797/ORERA wide dated 21/11/23 has given direction U/s. 37 of the Real Estate (regulation and development) Act, 2016 regarding imposition for delayed submission of QPR and AAC by promoters.

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The authority has decided to levy penalty for non-compliance of statutory provisions as aforesaid as follows[3]:

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CONCLUSION

In summary, the discussion highlights the critical importance of regulatory compliance in the real estate sector, particularly concerning the submission of Quarterly Progress Reports (QPR) and Annual Accounts Certificates (AAC) as mandated by the Real Estate (Regulation and Development) Act, 2016, and relevant state rules. Despite extensions granted by the regulatory authority, the observed non-compliance among many promoters underscores the need for robust enforcement mechanisms to ensure accountability and transparency.

The conclusion emphasizes the pivotal role of regulatory bodies, such as the Odisha Real Estate Regulatory Authority, in upholding the integrity of the real estate market by issuing binding directives to promote adherence to statutory obligations. Such measures are essential for safeguarding the interests of stakeholders, maintaining investor trust, and facilitating the orderly development of real estate projects in alignment with regulatory standards.

Ultimately, timely and accurate reporting by promoters is paramount for fostering a conducive environment for sustainable growth and ensuring compliance with legal requirements, thereby promoting confidence and stability within the real estate industry.

[1] Real Estate (regulation and development) Act, 2016 *a2016-16.pdf (indiacode.nic.in)

[2] Real Estate (regulation and development) Act, 2016, *a2016-16.pdf (indiacode.nic.in)

[3]ORERA ORDER NO. 6797/ORERA https://rera.odisha.gov.in/wp-content/uploads/2024/01/LR.NO-6797_0001-1.pdf